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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (15032)	1/30/2009 12:04:51 PM
From: Smiling Bob	Respond to of 19256

January 30, 2009, 11:38 am Amazon Parties Like 1999 Posted by David Gaffen CubeFor Amazon.com, it must feel like the old days. The company is gaining market share and investors are bowing down, boosting shares by 17% as analysts lustily applaud the company, with one headlining his report, “Worst Retail Environment in Modern History and Amazon Just Keeps Growing.” That said, this isn’t 1999 anymore, and commentators are looking a bit skeptically at the gains in the stock’s price as shares rally sharply to close out the week. Amazon shares have been hurt with the rest of the market, down 46% headed into today’s action from the beginning of 2008. But the stock has recovered, gaining 70% since hitting a trough in November. What surprised analysts was the company’s ability to increase market share and post strong sales in the worst quarter for economic growth since 1982, even though margins are slipping — the chief point of contention for those covering the company. amzn_art_200h_20090130113445.jpg Amazon.com is down from its 52-week high but has also rallied 70% from its 52-week low. “We forecast that Amazon’s revenue growth rate will decelerate in 2009 as retail sales declines worsen during a deep and prolonged global recession,” write analysts at Stanford Group. “Retailers have gotten increasingly more price competitive due to high inventories and weakened consumer demand.” They say the company may need to continue to discount further, which will hit margins. The company’s profit margin fell to 20.1% in the quarter, down 0.52 percentage point from the year-ago period, and its 18% increase in sales helped it surpass analyst expectations, leading Tim Boyd, analyst at Broadpoint.Amtech Research to say “we clearly under-estimated Amazon’s resilience in the near-term.” Mr. Boyd has a sell rating on the company, believing that growth is poised to decline sharply in the first quarter, and that margins will continue to fall (by their estimation, by 1.3 percentage point in the first quarter, and 2.20 percentage point in the second quarter). Still, the company’s ability to hang tough at this point is paying off in action Friday. Analysts at Battle Road Research raised their rating to “hold” from “sell,” suggesting that margin pressure may be offset if it continues to gain share in the electronics and general merchandise categories. Permalink \| Trackback URL: blogs.wsj.com Save & Share: Yahoo! Buzz \| Share on Facebook \| Del.icio.us \| Digg this \| Email This \| Print Read more: Earnings, Retailers, Stocks